By The Book: MFDA launches hearing, and more regulatory news for Tuesday

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(June 24, 2008) The Mutual Fund Dealers Association of Canada has launched disciplinary proceedings against Domenic Fanelli and Michele Torchia over alleged improprieties.

The MFDA alleges that from July 2002 to September 2003, Fanelli was engaged in an outside business activity without disclosing it to the firm. He allegedly conducted securities-related business through facilities other than his firm without approval.

Between February 2003 and September 2003, he is believed to have sold securities of a publicly traded company to individuals, which, as a mutual fund salesperson, he was not registered to do.

Fanelli is also alleged to have engaged in securities-related business with clients of AXA Financial Services while he was still registered with Investors Group.

When asked by the MFDA to supply copies of bank statements, he failed to comply.

Between November 25, 2002, and February 9, 2005, Torchia allegedly signed new account application forms and processed trade documentation as the approved person for clients that he had not previously met nor received instructions from. These actions not only violated his KYC requirements but also facilitated the processing of securities-related business through AXA by Fanelli.

Torchia failed to respond to the MFDA’s request to provide a written statement in response to a complaint from one of his clients. He then failed to attend an MFDA interview.

The first appearance in this matter will take place by teleconference before a hearing panel of the MFDA Central Regional Council in Toronto, on Tuesday, August 12, 2008, at 10:00 a.m.

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FINTRAC now applies to real estate agents

(June 24, 2008) Financial advisors are not the only ones required to keep tabs on suspicious transactions. As of June 23, all real estate agents and brokers are required to collect and verify the personal information and identity of their clients.

Agents must also now track the source of funds received during the course of a real estate transaction, such as the deposit, and report anomalies to the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.

Real estate agents have had the legal obligation to report any transaction that involved more than $10,000 in cash since 2001, explains Calvin Lindberg, president of the Canadian Real Estate Association.

“Now, verified personal information must be kept of the buyer and seller for each and every real estate transaction in Canada,” he says. “That personal information includes details such as occupation.”

(06/24/08)